Question

1. You have decided to start saving for retirement. You currently have $10,000 and you have decided to invest in the stock market. You expect your average annual return to be 10%. You plan on retiring in 30 years. Your goal is to have $1,500,000 by the time you retire.
   1. How much additional money do you need to deposit each year (at the end of the year) to reach your goal?
   2. Assume that plan on contributing an additional $10,000 each year. What is your required return to reach your objective?

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins Formulas Data - 2x 11 A A = = = V Wrap Text General File Home Insert Page Layout % Cut Calibri Ea Copy Paste B Format Painter I U D Clipboard Font FW133 fx Σ AutoSum : A Fill 2 Sort & m Find & - - A- E F Merge & Center $ % 48.08 Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Filter Editing Select Alignment Number Cells - FV FW FX FY FZ GA GB 117 118 119 120 121 122 AMOUNT AVAILABLE YEARS RATE FUTURE VALUE 10000 30 10.00% 174494.02 [=FV(FX120,FX119,,-FX118)] 123 TOTAL AMOUNT ACCUMULATED 124 174494.02 125 1500000 1325505.98 30 10.00% 8058.08 (=PMT(FX130, FX129,,-FX128)] 126 TARGET AMOUNT 127 128 SHORTFALL 129 YEARS 130 RATE 131 ANSWER: a : EXTRA DEPOSIT EACH YEAR 132 133 134 135 N LOAN OPTIONSpv, fv, annuity CAP STRU VALUE Rea ferences H profit margin symbols LOCK BOX DILUTION DOLLAR COST AVG MORTGAGE EXPONPER APR CPI ear FVA pva 00 DOR . * Shel 130% INC ENG 0 + 03:48 04-09-2019

PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins Data - 2x = = = General Σ AutoSum : A Fill 2 Sort & m Find & E V Wrap Text s Fat Merce Merge & Center - Center Alignment E E $ .0 .00 :.: Insert Delete Format % % , , Number Conditional Format Formatting as Table Styles Cell Styles 2 Clear Filter Editing Select Cells FX FY FZ GA GB File Home Insert Page Layout Formulas % Cut Calibri 11 A A Ea Copy Paste Format Painter BIU - D A Clipboard Font FY141 foc FVFW 132 133 SHORTFALL 135 YEARS 136 PMT 137 ANSWER:b: REQUIRED RETURN 138 139 140 141 142 143 134 1325505.98 AS CALCULATED EARLIER] 30 10000 8.85% (=RATE(FX135,-FX136,,FX134)] 144 145 146 147 148 149 150 H N CAP STRU VALUE profit margin symbols LOCK BOX DILUTION DOLLAR COST AVG MORTGAGE LOAN OPTIONSpv, fv, annuity ferences EXPONPER APR CPI ear FVA pva 00 DOR . * Shel 130% Red 0 + ENG 04-09-2019